President Aquino. INQUIRER FILE PHOTO
The controversy over the P35.4-billion Cavite Laguna Expressway (Calax) deal took another twist Monday as the consortium backed by Ayala Corp. and Aboitiz Land Inc. that topped the “qualified” bids last June removed from the table the threat of any legal challenge and urged President Benigno Aquino III to just choose a winner.
The Ayala-Aboitiz’s Team Orion filed a motion at the Office of the President to restate its view that it should be awarded the public private partnership (PPP) deal, which involves the construction and operation of a 45-kilometer tollroad south of Metro Manila, where Ayala owns wide swaths of land.
The move was also aimed at heading off a rebidding exercise, deemed costly both in time and resources, which Aquino last week said he was “inclined” to do. This was after disqualified San Miguel Corp. unit Optimal Infrastructure Development Inc. sought Malacañang’s intervention to reverse its removal from the competition and also be awarded the PPP deal.
Team Orion’s filing Monday was the latest development in an unfolding issue that started four months ago, when OIDI decided to challenge its disqualification over a technicality—the date on its bid bond validity came up four days short of the required 180 days.
The matter, which has since stalled the Calax deal, became complicated because OIDI’s offer, while not opened by the Department of Public Works and Highways but by San Miguel before the media last June 13, turned out to be the biggest at P20.1 billion.
This compares to Team Orion’s P11.659 billion, considered as the “highest complying bid” that edged out two other groups.
Government sources noted that Aquino’s inclination was being influenced by the wide gap between Team Orion’s offer and that of OIDI, amounting to P8.4 billion, despite the fact that the latter was disqualified.
Team Orion, in its motion Monday, acknowledged that the government could choose to declare a failed bid and re-auction the Calax project but it urged Aquino not to exercise this “unprecedented resort to the fine print” because it had submitted a complying offer.
“Team Orion reiterates its position that OIDI’s appeal be dismissed and that the DPWH decision disqualifying OIDI from the Calax bid must be upheld on the grounds that OIDI’s bid was not only deficient but was also not reviewed for technical compliance,” Team Orion said in a separate statement also Monday.
“However, should the President decide to grant OIDI’s appeal, Team Orion will respect such decision and commits to abide by it without legal recourse,” it said. “Team Orion hopes that OIDI also extend the same courtesy to the President should the President decide to reject its appeal and uphold the DPWH decision.”
OIDI, in a statement Monday, said it would respect any decision handed out by President Aquino.
“We vow to undertake the project if government decides to award it to OIDI and participate in case of a rebid—whether the original terms of reference are altered or retained,” said OIDI, which noted that it stood by its appeal that it should be recognized as the highest bidder for the Calax project.
Both OIDI and Team Orion were playing a high-stakes business game, with a very uncertain outcome now that Malacañang is involved, said Jose Mari Lacson, head of research at stockbrokerage firm Campos Lanuza and Co.
“They are now under game theory— but what is the most optimal move of the government? That is to reject all bids and do a rebid,” Lacson said in an interview Monday.
Nevertheless, in the days after Aquino’s announcement last week, various business groups and fund managers—both foreign and local—aired their worries over a rebidding. They said the move could scare away investors, especially the big foreign groups that are deemed crucial in sustaining the administration’s PPP program.
The PPP Center in recent weeks has launched investor marketing campaigns in Europe, United States, Canada, Japan and Singapore for the sole purpose of luring more participants to invest in a pipeline of about 50 projects, including railways and airports valued at more than $20 billion.
Meanwhile, Team Orion and the two other losing “qualified bidders,” a unit of Manuel V. Pangilinan-led Metro Pacific Investments Corp. and Malaysia’s MTD Group, will not or are unlikely to participate in any rebidding, they said. SMC president Ramon Ang said they would bid for all government projects up for auction.
Some of the reluctance is mainly due to the fact that in case of a Calax rebid, and assuming the same or similar terms are kept, there would already be a perceived floor price, which is OIDI’s P20.1 billion offer.
“Re-bidding Calax sets a dangerous precedent for future public bids. It undermines the very foundation of the PPP program. This is potentially a precedent that will give the next disqualified bidder reason and credence to take its appeal to Malacañang and hope for a similar outcome,” former finance secretary Roberto de Ocampo said in an e-mail Monday.